The ASEAN power grid project has become a cornerstone in Southeast Asia’s move toward a greener energy landscape, as regional authorities and international organizations unite around the goal of tapping into the area’s abundant renewable resources. The International Energy Agency (IEA) highlights the pressing need for action, pointing out that
Southeast Asia’s energy consumption in 2024 increased at twice the pace of the global average
and is expected to double by 2050. This rapid growth is fueled by economies pivoting to more energy-demanding sectors, such as data centers, while also facing the twin challenges of growing reliance on fossil fuels and escalating climate threats.
The envisioned ASEAN Power Grid (APG) seeks to tackle these challenges by linking the region’s separate national grids into a unified system that can transmit renewable electricity across borders. According to the IEA,
Southeast Asia’s unused renewable resources—20 terawatts from solar, onshore, and offshore wind
could satisfy future needs if properly developed. Yet, technical and political hurdles have long slowed progress. Variations in grid voltages, regulatory differences, and national interests in domestic energy strategies have led to fragmented efforts. Now, the increasing urgency of climate change and the demand for energy security are pushing countries toward greater regional cooperation.
A significant milestone was reached with a new funding program
introduced by the Asian Development Bank (ADB), the World Bank, and ASEAN
, which pledges up to $12.5 billion in initial capital and aims to attract more than $750 billion for grid expansion. This package includes $10 billion from the ADB and $2.5 billion from the World Bank over the coming ten years, along with technical support and risk reduction measures to encourage private sector involvement. The initiative coincides with an upcoming strengthened memorandum of understanding among ASEAN countries to finalize the APG’s master plan, an idea first suggested in the 1990s.
The APG offers strong economic and environmental incentives. A connected grid could decrease dependence on unpredictable fossil fuel imports, help stabilize energy costs, and cut emissions. For example,
offshore wind farms in Vietnam could deliver electricity to neighboring countries facing shortages
such as Singapore and Malaysia through subsea cables, while Singapore’s limited natural resources make it an ideal center for regional clean energy trade. Thailand and Indonesia are also set to gain as major energy importers. The IEA projects that
doubling the number of interconnections could boost ASEAN’s renewable capacity
from 7.2 gigawatts in 2022 to 33.5 gigawatts by 2037.
The worldwide market for battery energy storage systems is expected to hit $99.67 billion by 2033,
propelled by an annual growth rate of 28.8%
, with lithium-ion batteries leading due to their scalability and effectiveness. Flywheel batteries, known for their high power and quick response, are projected to expand at the fastest pace (30.7% CAGR),
helping to manage the variability of renewable energy sources
. The Asia-Pacific region is at the forefront of adoption,
representing 44.8% of the global market in 2024
, a pattern reflected in the APG’s emphasis on integrating storage solutions to balance fluctuating renewable output.
This transformation is backed by a comprehensive infrastructure strategy that incorporates energy storage and smart grid technologies. These advancements are vital for grid stability and for ensuring consistent power delivery throughout the region, even as renewable sources like wind and solar fluctuate.
The APG also supports broader decarbonization efforts, including the development of green hydrogen. The Asia-Pacific green hydrogen sector, estimated at $6.21 billion in 2025,
is projected to soar to $199.91 billion by 2035
as nations such as China, Japan, and South Korea ramp up electrolyzer production and export capacity. While not directly part of the APG, hydrogen could play a supporting role by storing surplus renewable energy for extended periods.
Some critics point to the APG’s $750 billion cost as a major obstacle, but supporters emphasize its long-term advantages: stronger energy security, lower emissions, and greater economic stability. For the 780 million people living in Southeast Asia, a modernized grid could drive sustainable industrial growth, enhance food security in the face of climate challenges, and help establish the region as a leader in clean energy.
As ADB President Masaru Hayami remarked
, "The APG is more than just an infrastructure project—it’s a driving force for regional unity and climate progress."
